Violent vandalism broke out at the Taiwan manufacturing company Wistron Corporation's iPhone production plant in India at Narasapura, 60 kms from Bengaluru, on Saturday night. The rioters, who the local media reported as the factory's staff, smashed windows and set fire to vehicles to protest reductions in salary.
A Wistron representative said some office furniture at the factory was damaged but the equipment on the main assembly lines and the warehouses remained intact.
In its complaint to the police, Wistron has said that the plant, which assembles iPhone SE 2020, had suffered losses worth Rs 440 crore, mostly due to the looting of the manufactured phones.
“We are deeply shocked by the events at our Narasapura facility,” Wistron said and added: “We follow the law and are supporting the authorities with their investigation.”
Pictures and video clips of the armed violence have gone viral on social media platforms, triggering international reactions.
Apple is already reportedly probing whether its contract manufacturer Wistron violated its supplier guidelines.
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Violence over alleged improper payments
According to various media reports, riots broke out inside the plant during a shift change when workers flew into a rage after seeing that their pay had been reduced. They allege that they were not paid their promised salary.
The irate workers reportedly damaged the office, its furniture, and factory equipment before things escalated outside. About 2,000 workers were said to be involved in the violent protest.
A police officer said that workers pelted stones, smashed glass windows, damaged vehicles, furniture, computers and laptops in connection with 'salary related issues.'
Police have detained over 130 people for the violence. The top State authorities have assured that the safety of Taiwanese businesses will be protected and the investigation into the riots will be expedited.
But there is already a concern in India over the possible impact of the violence on the investment friendly image of the State.
Karnataka promises safety to Taiwan company
This is Class War.India. Karnataka: Protests at iPhone production plant run by Taiwan-based Wistron Corp at Narasapura (in Kolar district) near Bengaluru. 🔥Workers allege they have not been paid properly. pic.twitter.com/UkqInEg8wkDecember 12, 2020
Wistron operates out of a 43-acres land attoted to it by the Karnataka Industrial Areas Development Board (KIADB) in Narasapura of Kolar district. As per the Karnataka Industrial Policy, 70 per cent of jobs should be given to locals. The company is believed to have recruited about 2,000 people so far.
Besides iPhone for Apple, Wistron also manufactures IT products for Lenovo and Microsoft, among others.
Ben Wang, head of the Taiwan office in Chennai, has said that he had discussed the matter with Karnataka's Chief Minister B S Yeddyurappa and Minister for Large and Medium Scale Industries Jagadish Shettar.
Shettar said the State government would give the necessary protection to the Wistron plant and to other foreign companies that have invested in the State.
Wistron's version of the events
Meanwhile, Taiwanese media, quoting a Taiwanese businessman based in India, said Wistron had commissioned employment agencies to pay the workers.
He reportedly said Wistron had commissioned five manpower agencies to recruit workers and had made full payments to the five agencies on time.
"The riots at the factory may have resulted from disputes between the contracted employment agencies and employees, but there are some issues that are not clear," he said.
"It is not clear whether the violence at the Wistron plant was instigated by employment agencies or the Indian factory managers to extort the company, taking advantage of its unfamiliarity with the laws and regulations in India," the businessman added.
Wistron said the incident was not a strike, but a criminal case, as the factory was targeted by gangsters.
"The rioters were outsiders, not factory employees," a Wistron representative said.
The company said the safety and wellbeing of its team members are always its top priority, and promised to follow local labour regulations and resume operations as soon as possible.
Apple probing incident; but no impact on production expected
The violence at its contract supplier's unit seems to have triggered some action from Apple. According to a report in the Economic Times, Apple is probing whether Wistron violated its supplier guidelines.
Apple’s supplier guidelines make it a must for third-party staffing agencies to pay workers and provide them other benefits as per rules and on time.
It is reported that Apple will examine whether there was any disparity in wages agreed and paid to the staff. "It will also check whether overtime by the workers was accounted for and they were paid according to norms."
It may be recalled Apple had recently placed its second-largest contract manufacturer Pegatron on probation for violating its supplier code of conduct in China. Pegatron had reportedly recruited students to make devices in China.
Meanwhile, India's premier news agency PTI is reporting that iPhone production in India will not be hit due to the violence at the Wistron plant. They have committed themselves to $900 million investment in the country over the next 5 years.
“iPhone production will have minor impact due to the violence. Only the iPhone SE 2020 is being made by Wistron in its Kolar’s plant. Enough stock is available in the market. Wistron has other plants in India where it may shift part of the production if its factory remains affected,” an industry source told PTI.
Apple has three contract phone-makers in India. Apart from Wistron, the other two are Foxconn and Pegatron. They have committed an investment of $900 million over the next 5 years in India.
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